Many drop down menus in the application will not allow you to select items at the bottom of the list without disappearing. For example in steam friends if you try to select the small arrow by a friend and choose join game from the options, it will disappear before you can reach that option.
This problem appears to show itself on any menu where there is an item that is in light gray text indicating that it cannot be selected. The menu turns off whenever the mouse moves over one of these options, regardless of whether or not there are options below it.